Medicare price negotiations could harm drug development
Eli Lilly CEO David Ricks on Tuesday said Medicare price negotiations, which aim to cut costs for older Americans, could potentially harm drug development.
"I'm really worried about the harm this will do to new cures and possibilities in medicine," Ricks said in an interview on CNBC's "The Exchange."
Ricks was referring to a provision in the Biden administration's Inflation Reduction Act that will allow the Medicare program to negotiate prices on the costliest prescription drugs each year.
He's the latest pharmaceutical executive to publicly blast the provision and law at large, which will likely reduce company profits. Global drugmaker Merck last week sued the Biden administration over Medicare price negotiations in a bid to weaken the program.
Ricks said the "biggest problem" with the provision stems from a difference in timeline for negotiating prices on small-molecule drugs — meaning those drugs made out of chemicals and have low molecular weight — versus biologic medicines, or those derived from living sources like animals or humans.
Under the IRA provision, Medicare can start negotiating prices on small-molecule drugs as early as nine years after they receive Food and Drug Administration approval, compared with 13 years for biologics.
Source: CNBC
